Canada’s Top Public Pension Returns 1.8% in Fiscal First Quarter

Canada’s largest public pension plan reported a 1.8% return in the first quarter of its new fiscal year.

Mark Machin, CEO of the Canada Pension Plan Investment Board (CPPIB), which has C$366.6 billion ($278.9 billion) in assets, said the fund had a strong performance from private equity, which represents 20.9% of the portfolio.

“While performance was solid across our investment departments, our private assets did particularly well. Global equity markets maintained positive performance this quarter, contributing to Fund growth,” Machin said in a statement.

The pension plan gained C$10.5 billion during the period ended June 30, and following its fiscal 2018 results, announced in May, it has achieved annual five- and 10-year returns of 12.3% and 8%, respectively.

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“While we focus on strong average returns stretching well beyond five and 10 years, solid performance today cushions the Fund for an inevitable future market downturn,” said Machin.

The remainder of the Canada investment board’s portfolio allocation was 37.7% public equity, 22.1% government fixed income, and 23.3% real assets, with the rest split among asset classes such as cash. Holdings in cash and absolute-return strategies were negative because of derivative-based net financing and repurchase agreements in tandem with the current net position of absolute-return strategies.

CPPIB does not define individual asset class returns by quarter.

Tags: Canada, Canada Pension Plan Investment Board, Mark Machin, Pension, Returns

Europe could be on the verge of breaking venture capital fundraising and deal values, according to data firm Preqin.

Over the past two years, Europe-focused VCs and growth fundraising achieved more than $30 billion: $17 billion in 2016 and $13.6 billion in 2017. The former was the first year the region passed the $11 billion mark in the space. This year, 54 funds have secured more than $12 billion in growth fundraising, which Preqin says puts it on track to break records.

Last year, the total deal value was a record $18.2 billion, and Preqin says the 2018 European venture capital deals could shatter that too. Europe has currently seen more than 1,400 of these deals this year.

The largest portion of the European venture capital deals come from the UK, with 32% announced accounting for 36% of deal value. Germany is the second-largest, but it is half that of the UK, holding 14% of the total deals and 18% of aggregate deal value.

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The 10 largest European venture capital deals since 2017 have all happened in either the UK or Germany. Nine of them are for internet or IT companies, reports Preqin.

Investors have expressed excitement about the VC space, as one quarter of those surveyed by Preqin in June see the best global opportunities there over the next year. Although most see the opportunities in North America, which has been the dominant VC region for years. the second-largest group of investors see the most opportunity in Europe.

“Just as the industry in North America is highly concentrated in the US, and the industry in Asia is focused on China and India, venture capital activity in Europe is dominated by the UK, Germany, and France,” said Christopher Elvin, head of Preqin’s private equity products. He added that while the size of the UK’s economy makes this an unsurprising find, the amount of activity is what has really contributed to its VC growth, rather than “just a few large deals.”

“It is true that Europe is home to fewer multi-billion-dollar venture capital-backed companies that command mega funding rounds, but the wider distribution of activity is indicative of a broad-based startup industry,” he said. “With investors favoring Europe as one of the regions presenting the best opportunities over the next 12 months, the region is likely to see its venture capital market grow even further.”

There have been 95 exits from the space in Europe this year, totaling $11 billion. The most are trade sales to corporate acquirers, which consist of 73% of transactions and 69% of exit value.

Tags: Europe, Preqin, Venture Capital